The Federal Communications Commission has squashed a creative compromise in the ongoing fight for open cable access as a way for high-speed Internet providers to deliver services via cable television broadband lines.

Contrary to a petition by Internet Ventures Inc., a Redondo Beach-based high-speed ISP, the FCC has declared that Internet content is not the equivalent of video programming.

If the FCC had upheld the petition, cable television companies would have been forced to lease access to their cable networks to ISPs.

"This has been a David and Goliath story from the start, so we knew our odds of successfully going against the lobbying power of AT & T; and the others was uphill," said Internet Ventures President Don Janke. "We just anticipated (the FCC) to have a bit better reason to deny our petition for leased access."

The FCC ruling was based on a very narrow definition, crafted in 1984, of what constituted video programming, thus making it markedly dated considering the explosive media revolution that has occurred over the last 15 years.

The telecommunications industry has engaged in a pitched battle over the cable access issue for well over a year now. Cable firms, most of which also own a broadband Internet service provider, have lobbied extensively to keep competitors from gaining access to their infrastructure, thus keeping the cable-modem industry a geographical monopoly similar to cable TV.

ISPs have fought at the federal, state and city level for open access, which would require cable companies to open their infrastructure to competitors at non-discriminatory costs. The FCC has so far ruled against intervening in the nascent industry, saying it needs to develop further before anti-monopolistic intervention could be considered.

While many in the cable industry argued that Janke's application of the leased access law to the Internet was ridiculous, the Internet Ventures petition received strong support from Rep. Rick Boucher, D-Virginia, who sits on the House telecommunications subcommittee and founded the House Internet Caucus in 1996.

In a Feb. 9 letter sent to FCC Chairman William Kennard, Boucher wrote that "granting the petition would clearly meet the goals (of section 612 of the Federal Telecommunications Act) by providing greater diversity and competition in the programming choices available to consumers."

Internet Ventures executives are reviewing several options, including petitioning the FCC to reconsider its ruling or even turning to the U.S. Court of Appeals.

Closed access proponents, however, consider this issue resolved.

Smart Move

In what could be a killer application for the embryonic smart card market, Oberthur Card Systems in Rancho Dominguez has forged an agreement with MasterCard International to create new smart cards allowing consumers to pay for e-commerce transactions over their mobile phones.

"We know this sounds rather futuristic, and Web-capable cell phones are a relatively new phenomenon, but the market is moving quickly in this direction," said Oburther spokeswoman Francine Dubois. "This is a smart card application that will work well here in the U.S., given Americans' increasing demand for convenient online access and the security problem e-commerce is facing."

Under the agreement, Oburther will develop, among other products, a MasterCard smart card that consumers can slip into a slot in a mobile phone to pay for a transaction, as well as create a MasterCard-enabled smart card chip embedded in mobile phones.

News & Notes

The Democratic National Convention Committee has selected in Marina del Rey as its official online event planner for the 2000 Democratic Convention in August in Los Angeles. For delegates, convention attendees and the media, Event411 will provide an online booking system for accommodations, a means to electronically coordinate schedules, and other convention-related services

Santa Monica-based InterPacket Networks has filed for an initial public offering, as has Monrovia-based Software Technologies Corp. InterPacket, which operates satellite-based, high-speed Internet networks, will be underwritten by Chase H & Q;, Lehman Brothers and CIBC World Markets. Software Technologies' IPO will be underwritten by Morgan Stanley Dean Witter, with Merrill Lynch & Co. Also, Donaldson, Lufkin and Jenrette will act as co-managers.

Contributing columnist Sara Fisher can be reached via email at


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